Lennox International (LII) 10-K risk factor changes: FY2021 vs FY2020

The most significant competitive factors we face are product reliability, product performance, reputation of our company and brands, service and [removed: price,] [added: price and global supply chain constraints resulting from the ongoing COVID-19 pandemic,] with the relative importance of these factors varying among our product lines.

We may not be able to adapt to market changes as quickly or effectively as our current [added: and future competitors.]

If We Cannot Successfully Execute our Business Strategy, Our Results of Operations Could be Adversely [removed: Impacted][added: Impacted.]

If we are unable to continue to timely and successfully develop and market new products, achieve technological [removed: advances] [added: advances,] or extend our business model and technological advances into international markets, our business and results of operations could be adversely impacted.

We are engaged in various manufacturing rationalization actions designed to achieve our strategic priorities of manufacturing, [removed: sourcing] [added: sourcing,] and distribution excellence and of lowering our cost structure.

For example, we are continuing to reorganize our North American distribution network in order to better serve our customers’ needs by deploying parts and equipment inventory closer to them and are expanding our sourcing activities outside of the U.S. [removed: We also continue to rationalize] [added: In such case, our results of operations] and [removed: reorganize various support] [added: profitability may be negatively impacted, making us less competitive] and [removed: administrative functions in order] [added: potentially causing us] to [removed: reduce ongoing selling and administrative expenses.][added: lose market share.]

We experienced such an event in July 2018, when our manufacturing facility in Marshalltown, Iowa was severely damaged by a [removed: tornado] [added: tornado,] and [removed: when suppliers experienced] [added: we continue to experience] disruptions [added: in supply] due to COVID-19.

Our inability to meet our customers’ demand for our products could have a material adverse effect on our business, financial [removed: condition] [added: condition,] and results of operations.

Claims of intellectual property infringement also might require us to redesign affected products, pay costly damage awards, or face injunction prohibiting us from manufacturing, importing, [removed: marketing] [added: marketing,] or selling certain of our products.

[removed: As] [added: In addition, as] of [removed: February 5,] [added: December 31,] 2021, approximately [removed: 26%] [added: 24%] of our workforce, including international locations, was unionized.

Our Financial Performance Is Affected by the Conditions [added: and Performance] of the U.S. Construction Industry.

Changes in [removed: Legislation or] [added: Environmental and Climate-Related Legislation,] Government [removed: Regulations] [added: Regulations,] or Policies Could Have an Adverse Effect on Our Results of Operations.

The sales, gross [removed: margins] [added: margins,] and profitability for each of our segments could be directly impacted by changes in [removed: legislation or government regulations or policies.][added: tariffs and trade agreements.]

Our inability or delay in developing or marketing products that match customer demand while also meeting applicable [removed: efficiency and environmental standards] [added: LRPs] may negatively impact our results.

The sales, gross [removed: margins] [added: margins,] and profitability for each of our segments could be directly impacted by changes in [removed: tariffs] [added: legislation, government regulations, or policies (collectively, “LRPs”) relating to global climate change] and [removed: trade agreements.][added: other environmental initiatives and concerns.]

The continuing adoption or expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies has the potential to adversely impact demand for our products, our costs, our customers, our suppliers, and the U.S. economy, which in turn could have a material adverse effect on our business, operating [removed: results] [added: results,] and financial condition.

The development, manufacture, sale and use of our products involve warranty, intellectual property infringement, [added: and] product liability [removed: claim] [added: claims,] and other [removed: risks.][added: liabilities and risks for the installation and service of our products.]

Our product liability insurance policies have limits that, if exceeded, may result in substantial costs that [removed: would] [added: could] have an adverse effect on our results of operations.

We are Subject to [removed: Litigation and Tax, Environmental] [added: Claims, Lawsuits,] and Other [removed: Regulations that] [added: Litigation That] Could Have an Adverse Effect on Our Results of Operations.

We are involved in various claims and lawsuits incidental to our business, including those involving product liability, labor relations, alleged exposure to asbestos-containing materials and environmental matters, some of which claim significant [added: damages.]

[removed: These laws] [added: Additionally, the extensive] and [added: ever-changing legislation and] regulations could impose [added: increased] liability for remediation costs and civil or criminal penalties in cases of non-compliance.

[removed: In] [added: Since] 2020, the spread of COVID-19 and the developments surrounding the global pandemic disrupted our business operations and affected our results [removed: of operations.]

[removed: As the COVID-19 pandemic continues, health concern risks remain, and we] [added: We] cannot predict whether any of our manufacturing, [removed: operational] [added: operational,] or distribution facilities will experience [added: any future] disruptions, or how long such disruptions would last.

We cannot predict the likelihood, [removed: duration] [added: duration,] or severity of any future disruption in financial markets or any adverse economic conditions in the U.S. and other countries.

We earn revenue, pay expenses, own [removed: assets] [added: assets,] and incur liabilities in countries using currencies other than the U.S. dollar.

Our Consolidated Financial Statements are presented in U.S. dollars and we translate revenue, income, expenses, [removed: assets] [added: assets,] and liabilities into U.S. dollars at exchange rates in effect during or at the end of each reporting period.

In addition to the currency exchange risks inherent in operating in foreign countries, our international [removed: sales] [added: sales,] and operations, including purchases of raw materials from international suppliers, are subject to risks associated with local government laws, [removed: regulations] [added: regulations,] and policies (including those related to tariffs and trade barriers, investments, taxation, exchange controls, employment regulations and changes in laws and regulations).

[removed: Our international sales and operations are also sensitive to] changes in foreign national priorities, including government budgets, as well as to geopolitical and economic instability.

Conflicts, wars, natural disasters, [added: climate change,] infectious disease outbreaks or terrorist acts could also cause significant damage or disruption to our operations, employees, facilities, systems, suppliers, supply chain, distributors, [removed: resellers] [added: resellers,] or customers in the United States and internationally for extended periods of time and could also affect demand for our products.

Net sales outside of the United States comprised [removed: 13.0%] [added: approximately 13%] of our [added: total] net sales in [removed: 2020.][added: 2021.]

Attempts have been made to attack our information systems, but [removed: no] [added: we do not believe that] material harm has resulted.

From time to time, we may seek to complement or expand our businesses through strategic acquisitions, joint [removed: ventures] [added: ventures,] and strategic relationships.

The success of these transactions will depend, in part, on our ability to timely identify those relationships, negotiate and close the transactions and then integrate, [removed: manage] [added: manage,] and operate those businesses profitably.

As of December 31, [removed: 2020,] [added: 2021,] we had goodwill of [removed: $186.9] [added: $186.6] million on our Consolidated Balance Sheet.

Any future determination that an impairment of the value of goodwill occurred would require a write-down of the impaired portion of goodwill to fair [added: value and would reduce our assets and stockholders’ equity and could have a material adverse effect on our results of operations.]

Our Operations Can Be Adversely Affected By Our Ability to Attract, Motivate, Develop, and Retain Our Employees, Labor Shortages and Work Stoppages, Turnover, Labor Cost Increases and Other Labor Relations Problems.

We are committed to attracting, motivating, developing, and retaining our employees to ensure we remain an employer of choice.

Despite our efforts, we have experienced, and could continue to experience, higher employee turnover and absenteeism, particularly in manufacturing and distribution locations, as a result of COVID-19 related concerns and other factors.

A number of factors may adversely affect the labor force available or increase labor costs, including high employment levels, related competition, and federal unemployment subsidies, such as unemployment benefits offered in response to the COVID-19 pandemic.

These concerns have decreased the pool of available qualified talent for certain functions.

Our Marshalltown, Iowa-based union ratified a five-year labor agreement on November 1, 2021; however, the results of future negotiations with unions are uncertain.

If we are unsuccessful in meeting these challenges, our results of operations could be materially impacted.

The effects of climate change, such as extreme weather conditions and events and water scarcity, may exacerbate fluctuations in typical weather patterns, creating financial risks to our business.

The ongoing COVID-19 pandemic has resulted in increased global supply chain constraints and disruption to the operations of certain of our suppliers and we cannot predict the duration or severity of current supply-chain issues, including increased input material costs and component shortages, delivery disruptions and delays, and inflation.

Additionally, the effects of climate change, including extreme weather events, long-term changes in temperature levels, water availability, increased cost for decarbonizing process heating, supply costs impacted by increasing energy costs, or energy costs impacted by carbon prices or offsets may exacerbate supply chain constraints and disruption.

Resulting supply chain constraints have required, and may continue to require, in certain instances, alternative delivery arrangements and increased costs and could have a material adverse effect on our business and operations.

These LRPs, implemented under global, national, and sub-national climate objectives or policies, can include changes in environmental and energy efficiency standards and tend to target the global warming potential of refrigerants and hydrofluorocarbons, equipment energy efficiency, and combustion of fossil fuels as a heating source.

Many of our products consume energy and use refrigerants and hydroflurocarbons.

LRPs that seek to reduce greenhouse gas emissions may require us to make increased capital expenditures to develop or market new products to meet new LRPs.

Further, our customers and the markets we serve may impose emissions or other environmental standards through LRPs or consumer preferences that may

require additional time, capital investment, or technological advancement.

There continues to be a lack of consistent climate legislation and regulations, which creates economic and regulatory uncertainty.

Such regulatory uncertainty could adversely impact the demand for energy efficient buildings and could increase costs of compliance.

of operations.

In 2021, the COVID-19 pandemic continued to create supply chain disruptions and higher employee absenteeism in our factories and distribution locations.

As the COVID-19 pandemic continues, health concern risks remain.

In 2021, various forms of a vaccine for COVID-19 were approved and began to be distributed.

However, the large scale and challenging logistics of distributing the vaccines, as well as uncertainty over the efficacy of the vaccines against new variants of the virus, may impact the economy as well as our operations in the future.

While we are experiencing positive results despite the COVID-19 pandemic, there remains uncertainty regarding how COVID-19 will impact our results in the future.

The effects of the COVID-19 pandemic may continue for a significant period of time and may adversely affect our business, results of operations and financial condition even after the COVID-19 pandemic has subsided.

The extent to which the COVID-19 pandemic impacts us will depend on numerous evolving factors and future developments that we are not able to predict, including the duration and scope of the pandemic; governmental, business, and individuals’ actions in response to the pandemic; our ability to maintain sufficient qualified personnel due to employee illness, quarantine, willingness to return to work, vaccine and/or testing mandates, face-coverings and other safety requirements, general scarcity of employees, or travel and other restrictions; current global supply chain disruptions caused by the COVID-19 pandemic; and the impact on economic activity, including financial market instability.

Our international sales and operations are also sensitive to

and future competitors.

If we cannot successfully implement such distribution and restructuring strategies or other cost savings plans, we may not achieve our expected cost savings in the time anticipated, or at all.

In such case, our results of operations and profitability may be negatively impacted, making us less competitive and potentially causing us to lose market share.

Because a Significant Percentage of Our Workforce is Unionized in Certain Manufacturing Facilities, We Face Risks of Work Stoppages and Other Labor Relations Problems.

The results of future negotiations with these unions and the effects of any production interruptions or labor stoppages could have a material adverse effect on our results of operations.

Specifically, changes in environmental and energy efficiency standards and regulations related to global climate change are being implemented to curtail the use of hydrofluorocarbons which are used in refrigerants that are essential to many of our products.

For example, in 2016, the Montreal Protocol was amended to phase down the use of hydrofluorocarbons, which may particularly have a significant impact on the types of products that we are allowed to develop and sell.

Future legislation or regulations relating to environmental policies, product certification, product liability, taxes, amount and availability of tax incentives and other matters, may impact the results of each of our operating segments and our consolidated results.

In some cases, we may incur liability claims for the installation and service of our products.

damages.

In addition, we are subject to extensive and changing federal, state and local laws and regulations designed to protect the environment.

Compliance with environmental laws increases our costs of doing business.

For example, in response to the COVID-19 pandemic, various national, state, and local governments where we, our suppliers, and our customers operate issued decrees prohibiting certain businesses from continuing to operate and certain classes of workers from reporting to work.

Those decrees resulted in supply chain disruption and higher absenteeism in our factories.

Additionally, certain of our manufacturing facilities experienced short-term suspensions of operations for COVID-19 employee health concerns.

We implemented several cost reduction actions in the second quarter of 2020, including employee terminations, temporary facility closures and cancellations of certain sales and marketing activities, and revised our financial outlook downward to account for COVID-19’s expected economic impact on our Company and future uncertainty.

By the end of 2020, numerous countries including, the United States, Canada, United Kingdom, European Union, and Mexico had approved various forms of a vaccine for COVID-19 and began distributing them to their citizens in hope of slowing the spread of COVID-19.

The timing of any positive impact from the vaccines is uncertain.

Additionally, it is unknown if current vaccines will work on the new strains of the coronavirus which have been reported in numerous countries, including the United Kingdom and United States.

It also remains unclear how various national, state, and local governments will react if the distribution of vaccines is slower than expected.

If the COVID-19 pandemic worsens or the pandemic continues longer than presently expected, COVID 19 would continue to impact our results of operations, financial position and cash flows.

value and would reduce our assets and stockholders’ equity and could have a material adverse effect on our results of operations.

A novel strain of coronavirus [removed: or, COVID-19,] [added: (“COVID-19”) has] surfaced [removed: in late 2019] and [removed: has] spread around the [removed: world.][added: world, including to the United States.]

[removed: As the COVID-19 pandemic continues, health concern risks remain, and we] [added: We] cannot predict whether any of our manufacturing, operational or distribution facilities will experience [added: any future] disruptions, or how long such disruptions would last.

It also remains unclear how various national, state, and local governments will react if the distribution of vaccines is slower than [removed: expected.][added: expected or new variants of the virus become more dominant.]

If the COVID-19 pandemic worsens or the pandemic continues longer than presently expected, COVID 19 [removed: would continue to] [added: could] impact our results of operations, financial position and cash flows.

- Diluted earnings per share from continuing operations were [removed: $9.26] [added: $12.39] per share in [removed: 2020] [added: 2021] compared to [removed: $10.38] [added: $9.26] per share in [removed: 2019.][added: 2020.]

- We generated [removed: $612] [added: $516] million of cash flow from operating activities in [removed: 2020] [added: 2021] compared to [removed: $396] [added: $612] million in [removed: 2019.][added: 2020.]

- In [removed: 2020,] [added: 2021,] we returned [removed: $118] [added: $127] million to shareholders through dividend payments and we used [removed: $100] [added: $600] million to purchase [removed: 0.4] [added: 1.9] million shares of stock under our Share Repurchase Plans.

The Residential Heating & Cooling segment performed well in [removed: 2020,] [added: 2021,] with [removed: a 3%] [added: an 18%] increase in net sales and a [removed: $36] [added: $112] million [removed: decrease] [added: increase] in segment profit compared to [removed: 2019] [added: 2020] primarily due to [removed: the insurance proceeds received for lost profits in 2019.][added: higher sales volumes.]

Our Commercial Heating & Cooling segment saw [removed: a decrease] [added: an increase] in net sales of [removed: 15%] [added: 8%] and a [removed: $29] [added: $26] million decrease in segment profit compared to [removed: 2019] [added: 2020] primarily due to [removed: lower] [added: increased combined price and] sales [removed: volumes.][added: mix and increased product costs, respectively.]

| | | | [removed: 2020] [added: 2021] | | | | | | | | | | | | [removed: 2019] [added: 2020] | | | | | | | | | | | | [removed: 2018] [added: 2019] | | | | | | | | |

| Net sales | | | $ | [removed: 3,634.1] [added: 4,194.1] | | | | | 100.0 | | % | | | | $ | [removed: 3,807.2] [added: 3,634.1] | | | | | 100.0 | | % | | | | $ | [removed: 3,883.9] [added: 3,807.2] | | | | | 100.0 | | % |

| Cost of goods sold | | | [removed: 2,594.0] [added: 3,005.7] | | | | | | [removed: 71.4] [added: 71.7] | | % | | | | [removed: 2,727.4] [added: 2,594.0] | | | | | | [removed: 71.6] [added: 71.4] | | % | | | | [removed: 2,772.7] [added: 2,727.4] | | | | | | [removed: 71.4] [added: 71.6] | | % |

| Gross profit | | | [removed: 1,040.1] [added: 1,188.4] | | | | | | [removed: 28.6] [added: 28.3] | | % | | | | [removed: 1,079.8] [added: 1,040.1] | | | | | | [removed: 28.4] [added: 28.6] | | % | | | | [removed: 1,111.2] [added: 1,079.8] | | | | | | [removed: 28.6] [added: 28.4] | | % |

| Selling, general and administrative expenses | | | [removed: 555.9] [added: 598.9] | | | | | | [removed: 15.3] [added: 14.3] | | % | | | | [removed: 585.9] [added: 555.9] | | | | | | [removed: 15.4] [added: 15.3] | | % | | | | [removed: 608.2] [added: 585.9] | | | | | | [removed: 15.7] [added: 15.4] | | % |

| Losses (gains) and other expenses, net | | | [removed: 7.4] [added: 9.2] | | | | | | 0.2 | | % | | | | [removed: 8.3] [added: 7.4] | | | | | | 0.2 | | % | | | | [removed: 13.4] [added: 8.3] | | | | | | [removed: 0.3] [added: 0.2] | | % |

| Restructuring charges | | | [removed: 10.8] [added: 1.8] | | | | | | [removed: 0.3] [added: —] | | % | | | | [removed: 10.3] [added: 10.8] | | | | | | 0.3 | | % | | | | [removed: 3.0] [added: 10.3] | | | | | | [removed: 0.1] [added: 0.3] | | % |

| Loss (gain), net on sale of businesses and related property | | | — | | | | | | — | | % | | | | [removed: 10.6] [added: —] | | | | | | [removed: 0.3] [added: —] | | % | | | | [removed: 27.0] [added: 10.6] | | | | | | [removed: 0.7] [added: 0.3] | | % |

| [removed: Loss (gain)] [added: (Gain) loss] from natural disasters, net of insurance recoveries | | | [removed: 3.1] [added: —] | | | | | | [removed: 0.1] [added: —] | | % | | | | [removed: (178.8)] [added: 3.1] | | | | | | [removed: (4.7)] [added: 0.1] | | % | | | | [removed: (38.3)] [added: (178.8)] | | | | | | [removed: (1.0)] [added: (4.7)] | | % |

| Income from equity method investments | | | [removed: (15.6)] [added: (11.8)] | | | | | | [removed: (0.4)] [added: (0.3)] | | % | | | | [removed: (13.4)] [added: (15.6)] | | | | | | (0.4) | | % | | | | [removed: (12.0)] [added: (13.4)] | | | | | | [removed: (0.3)] [added: (0.4)] | | % |

| Operating income | | | $ | [removed: 478.5] [added: 590.3] | | | | | [removed: 13.2] [added: 14.1] | | % | | | | $ | [removed: 656.9] [added: 478.5] | | | | | [removed: 17.3] [added: 13.2] | | % | | | | $ | [removed: 509.9] [added: 656.9] | | | | | [removed: 13.1] [added: 17.3] | | % |

| Loss from discontinued operations | | | [removed: (0.8)] [added: —] | | | | | | — | | % | | | | [removed: (0.1)] [added: (0.8)] | | | | | | — | | % | | | | [removed: (1.3)] [added: (0.1)] | | | | | | — | | % |

| Net income | | | $ | [removed: 356.3] [added: 464.0] | | | | | [removed: 9.8] [added: 11.1] | | % | | | | $ | [removed: 408.7] [added: 356.3] | | | | | [removed: 10.7] [added: 9.8] | | % | | | | $ | [removed: 359.0] [added: 408.7] | | | | | [removed: 9.2] [added: 10.7] | | % |

| Foreign currency exchange [removed: losses] [added: gains] | | | (3.6) | | | | | | (1.5) | | |

| [removed: Loss] [added: Gain] on disposal of fixed assets | | | (0.2) | | | | | | (0.2) | | |

| Net change in unrealized [removed: (gains) losses] [added: gains] on unsettled futures contracts | | | (0.3) | | | | | | (0.5) | | |

| Other operating [removed: (gains) losses, net] [added: income] | | | (2.2) | | | | | | (1.7) | | |

[removed: For more information on our restructuring activities, see] [added: See] Note [removed: 8 in] [added: 14 of] the Notes to the Consolidated Financial [removed: Statements.][added: Statements for more information on our debt obligations.]

Segment profit in 2020 declined $36 million compared to 2019 due to $99 million of non-recurring insurance proceeds for lost profits related to the Marshalltown tornado, $10 million of higher warranty and other product costs, $5 million of higher [removed: tariffs on Chinese imports,] [added: tariffs,] $3 million of combined price and mix, and $1 million of factory inefficiency.

Partially offsetting these declines [removed: was] [added: were] $25 million of lower SG&A, $25 million of engineering and sourcing led cost reductions, $17 million from lower commodity costs, $8 million of lower freight and distribution expense, $5 million of higher sales volume, and $2 million of higher income from equity method investments.

Partially offsetting these declines [removed: was] [added: were] $9 million of lower SG&A, $7 million of engineering and sourcing led cost reductions, $6 million from lower commodity costs, $2 million of factory productivity, $2 million of other product costs, $1 million of lower tariffs on [removed: Chinese] imports, and $1 million of favorable foreign currency exchange rates.

Partially offsetting these declines [removed: was] [added: were] $5 million from lower commodity costs, $4 million of engineering and sourcing led cost reductions, $4 million lower SG&A, $1 million lower freight and distribution expense, $1 million of higher profit due to the divestiture of the Kysor Warren business, and $1 million of favorable foreign currency exchange rates.

Year Ended December 31, [removed: 2019] [added: 2021] Compared to Year Ended December 31, [removed: 2018] [added: 2020] - Consolidated Results

The increase in volume [removed: was primarily due to market growth in our Residential Heating & Cooling] and [removed: Commercial Heating & Cooling segments, and the favorable] price and mix [removed: combined] was [removed: attributable] [added: due] to [added: strong demand across] all three of our business segments.

Gross profit margins for [removed: 2019] [added: 2021] decreased [removed: 20] [added: 30] basis points (“bps”) to [removed: 28.4%] [added: 28.3%] compared to 28.6% in [removed: 2018.][added: 2020.]

[removed: We saw] [added: Gross profit] margin [removed: decreases of 30] [added: decreased 180] bps from higher commodity costs, [removed: 80] [added: 90] bps from [added: other product costs, 20 bps from] higher freight and distribution costs, [removed: 70] [added: and 10] bps [removed: from] [added: for] lower factory [removed: productivity, and 50 bps from other product costs.][added: efficiency.]

As a percentage of net sales, SG&A expenses decreased [removed: 30] [added: 100] bps from [removed: 15.7%] [added: 15.3%] to [removed: 15.4%] [added: 14.3%] in the same [removed: periods.][added: periods primarily due to lower discretionary expenditures.]

Losses (gains) and other expenses, net for [removed: 2019] [added: 2021] and [removed: 2018] [added: 2020] included the following (in millions):

| Realized [added: (gains)] losses [removed: (gains), net] on settled futures contracts | | | $ | [removed: 0.4] [added: (1.2)] | | | | | $ | [removed: (0.4)] [added: 0.1] | |

| Foreign currency exchange [removed: (gains) losses, net] [added: gains] | | | [removed: (1.5)] [added: (2.2)] | | | | | | [removed: 1.7] [added: (3.6)] | | |

| [removed: (Gains) losses] [added: Gain] on disposal of fixed assets | | | (0.2) | | | | | | [removed: 0.7] [added: (0.2)] | | |

*Impact of COVID-19 Pandemic*

In March 2020, the World Health Organization declared COVID-19 a pandemic.

Currently the COVID-19 pandemic has disrupted

our business operations and caused a significant unfavorable impact on our results of operations in 2020.

The COVID-19 pandemic is creating supply chain disruptions and higher employee absenteeism in our factories and distribution locations.

As the COVID-19 pandemic continues, health concern risks remain.

- Net sales increased $560 million, or 15%, to $4,194 million in 2021 from $3,634 million in 2020.

- Operating income in 2021 was $590 million compared to $479 million in 2020.

- Net income in 2021 increased to $464 million from $356 million in 2020.

Sales in our Refrigeration segment increased 17% and segment profit increased $16 million compared to 2020 primarily due to higher sales volumes.

Net sales increased 15% in 2021 compared to 2020, driven by higher sales volumes of 11% and an improved combined price and mix of 4%.

Partially offsetting these cost increases was 270 bps from favorable combined price and mix.

SG&A expenses increased by $43 million in 2021 compared to 2020.

| | | | 2021 | | | | | | 2020 | | |

| Other operating income | | | (1.5) | | | | | | (2.2) | | |

| Environmental liabilities | | | 2.9 | | | | | | (1.4) | | |

| Charges incurred related to COVID-19 pandemic | | | 2.2 | | | | | | 8.3 | | |

Restructuring charges were $1.8 million in 2021 compared to $10.8 million in 2020.

Charges in 2021 were related to ongoing cost reduction actions taken in prior years.

The decrease is due to rising production costs at the joint ventures.

Net interest expense of $25 million in 2021 decreased from $28 million in 2020 primarily due to lower borrowing and lower borrowing costs.

| | | | 2021 | | | | | | 2020 | | | | | | Difference | | | | | | % Change | | |

| Net sales | | | $ | 2,775.6 | | | | | $ | 2,361.5 | | | | | $ | 414.1 | | | | | 18% | | |

| Profit | | | $ | 540.3 | | | | | $ | 428.5 | | | | | $ | 111.8 | | | | | 26% | | |

Sales volume increased 13%, price increased 5% and favorable foreign currency exchange rates caused an increase of 1%.

Partially offsetting these increases was a 1% reduction due to unfavorable product mix.

Partially offsetting these increases were $59 million from

commodity costs, $20 million from higher warranty and other product costs, $14 million from higher SG&A, $5 million from unfavorable product mix, and $5 million from lower income from equity method investments.

| | | | 2021 | | | | | | 2020 | | | | | | Difference | | | | | | % Change | | |

| Net sales | | | $ | 864.8 | | | | | $ | 800.9 | | | | | $ | 63.9 | | | | | 8 | | % |

| Profit | | | $ | 110.9 | | | | | $ | 136.9 | | | | | $ | (26.0) | | | | | (19) | | % |

| % of net sales | | | 12.8 | | % | | | | 17.1 | | % | | | | | | | | | | | | |

Segment profit in 2021 decreased $26 million compared to 2020 due to $17 million from higher other product costs, $14 million from factory inefficiencies, $6 million from sourcing and engineering-led cost increases, $6 million from higher commodity costs, $6 million from higher freight and distribution costs, $4 million from higher SG&A costs, and $1 million from unfavorable foreign currency.

Partially offsetting these declines was a favorable increase in combined price and mix of $19 million and $9 million from higher sales volume.

| | | | 2021 | | | | | | 2020 | | | | | | Difference | | | | | | % Change | | |

| Net sales | | | $ | 553.7 | | | | | $ | 471.7 | | | | | $ | 82.0 | | | | | 17 | | % |

| Profit | | | $ | 49.1 | | | | | $ | 32.8 | | | | | $ | 16.3 | | | | | 50 | | % |

| % of net sales | | | 8.9 | | % | | | | 7.0 | | % | | | | | | | | | | | | |

Net sales increased 17% in 2021 compared to 2020.

Sales volume increased 14%, price increased 3%, and foreign currency improved 1%.

*Impact of COVID-19 Pandemic and the Resulting Changes to our 2020 Financial Performance*

In 2020, the spread of COVID-19 and the developments surrounding the global pandemic disrupted our business operations and affected our results of operations.

For example, in response to the COVID-19 pandemic, various national, state, and local governments where we, our suppliers, and our customers operate issued decrees prohibiting certain businesses from continuing to operate and certain classes of workers from reporting to work.

Those decrees resulted in supply chain disruption, higher absenteeism in our factories, and negatively impacted net sales for our Commercial and Refrigeration segments.

Additionally, certain of our manufacturing facilities experienced short-term suspensions of operations for COVID-19 employee health concerns.

We implemented several cost reduction actions in the second quarter of 2020, including employee terminations, temporary facility closures and cancellations of certain sales and marketing activities, and revised our financial outlook downward to account for COVID-19’s expected economic impact on our Company and future uncertainty.

- Net sales decreased $173 million, or 5%, to $3,634 million in 2020 from $3,807 million in 2019.

- Operating income in 2020 was $479 million compared to $657 million in 2019, which included $179 million net gain from insurance recoveries.

- Net income in 2020 decreased to $356 million from $409 million in 2019.

The

increase was primarily due to a decrease in working capital.

Results for the year were mixed and adversely impacted by the economic downturn caused by the COVID-19 pandemic.

Sales in our Refrigeration segment decreased 17% and segment profit decreased $29 million compared to 2019 primarily due to lower sales volume and the loss of sales volume from our divested Kysor Warren business.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

In the second and fourth quarters of 2019, we entered into agreements to purchase group annuity contracts and transfer certain pension assets and related pension benefit obligations to Pacific Life Insurance Company.

We recognized $99.2 million of pension settlement charges related to these transactions.

The increase is due to improved operating performance at the joint ventures.

Net sales decreased 2.0% in 2019 compared to 2018, driven by a 5% decline related to the divestitures of our Australia, Asia, South America, and Kysor Warren businesses, partially offset by 1% volume growth and 2% from favorable price and mix combined.

These decreases were offset by increases of 100 bps from favorable price and mix, 50 bps from sourcing and engineering-led cost reductions, and 60 bps from our divested Australia, Asia, South America, and Kysor Warren businesses which collectively had lower margins.

SG&A expenses decreased by $22 million in 2019 compared to 2018.

SG&A decreased primarily due to the sale of our divested Australia, Asia, South America, and Kysor Warren businesses.

| | | | 2019 | | | | | | 2018 | | |

| Other operating (gains) losses | | | (1.7) | | | | | | — | | |

| Environmental liabilities | | | 5.7 | | | | | | 2.2 | | |

The realized gains on settled futures contracts in 2018 were attributable to changes in commodity prices relative to our settled futures contract prices, as commodity prices have increased in 2018 relative to 2017.

Restructuring charges were $10.3 million in 2019 compared to $3.0 million in 2018.

The charges in 2019 related primarily to activities in the Residential Heating & Cooling segment to close certain Lennox Stores and reduce management and support staff, and activities in the Commercial Heating & Cooling segments to re-align resources and its product portfolio.

The charges in 2018 were primarily for projects to realign resources and enhance manufacturing and distribution capabilities.

December 31, 2019.

*Asset Impairment*

Net interest expense of $48 million in 2019 increased from $38 million in 2018 primarily due to an increase in our average borrowings.

We expect our effective tax rate will be between 21% and 22% in future years, excluding the impact of excess tax benefits.

Refer to Note 13 in the Notes to the Consolidated Financial Statements for more information on the impact of recent changes in tax legislation.

There were no significant losses from discontinued operations in 2019.

| | | | 2019 | | | | | | 2018 | | | | | | Difference | | | | | | % Change | | |

| Net sales | | | $ | 2,291.1 | | | | | $ | 2,225.0 | | | | | $ | 66.1 | | | | | 3% | | |

| Profit | | | $ | 464.6 | | | | | $ | 399.4 | | | | | $ | 65.2 | | | | | 16% | | |

| % of net sales | | | 20.3 | | % | | | | 18.0 | | % | | | | | | | | | | | | |

Segment profit in 2019 increased $65 million compared to 2018 due to an incremental $72 million of insurance proceeds for lost profits related to the Marshalltown tornado, $53 million of favorable price, $14 million of sourcing and engineer-led cost reductions, $8 million of lower warranty costs, and $2 million of higher sales volume.

We are a [removed: leading] global [removed: provider of climate control] [added: leader in energy-efficient climate-control] solutions.

Shown in the table below are our three business segments, the key products, services and well-known product and brand names within each segment and net sales in [removed: 2020] [added: 2021] by segment.

Segment financial data for [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018,] [added: 2019,] including financial information about foreign and domestic operations, is included in Note 3 of the Notes to our Consolidated Financial Statements in “Item 8.

| Segment | | | | | | Products & Services | | | | | | Product and Brand Names | | | | | | [removed: 2020] [added: 2021] Net Sales (in millions) | | |

| Residential Heating & Cooling | | | | | | Furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts and supplies | | | | | | Lennox, Dave Lennox Signature Collection, Armstrong Air, Ducane, [removed: Air-Ease,] [added: AirEase,] Concord, [removed: MAGICPAK,] [added: MagicPak,] ADP Advanced Distributor Products, Allied, Elite Series, Merit Series, Comfort Sync, [removed: Humiditrol,] Healthy Climate, Healthy [added: Climate] Solutions, iComfort [added: ComfortSense] and Lennox Stores | | | | | | $ | [removed: 2,361.5] [added: 2,775.6] | |

| Commercial Heating & Cooling | | | | | | Unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment, variable refrigerant flow commercial products | | | | | | Lennox, [removed: Allied Commercial, Magic-Pak, Raider, Landmark,] [added: Model L, CORE, Energence,] Prodigy, Strategos, [removed: Energence,] [added: Landmark, Raider,] Lennox [removed: VRF and] [added: VRF,] Lennox National Account [removed: Services] [added: Services, Allied Commercial, MagicPak] | | | | | | [removed: 800.9] [added: 864.8] | | |

| Refrigeration | | | | | | Condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, process chillers, controls, compressorized racks. | | | | | | Heatcraft Worldwide Refrigeration, Lennox (Europe HVAC), Bohn, [added: MAGNA,] Larkin, Climate Control, Chandler Refrigeration, Friga-Bohn, HK Refrigeration, Hyfra, IntelliGen and Interlink | | | | | | [removed: 471.7] [added: 553.7] | | |

The “Lennox” [added: business and] brands [added: (“Dave Lennox Signature Collection,” “Elite Series,” “Merit Series,” “iComfort,” “ComfortSense” and “Healthy Climate Solutions”)] are sold directly to [removed: a network of approximately 9,000] independent installing dealers, making us one of the largest wholesale distributors of residential [removed: heating] [added: heating, ventilation,] and air conditioning products in North America.

The Allied Air Enterprise [added: business and] brands (“Armstrong Air,” [removed: “Air-Ease,”] [added: “AirEase,”] “Concord,” “Ducane,” [added: “Allied,”] and [removed: “Magic-Pak”)] [added: “MagicPak”)] include a full line of [removed: heating] [added: heating, ventilation] and air conditioning products and are sold through independent [added: wholesale] distributors in [removed: North America.][added: the U.S. and Canada.]

We continue to invest in our network of [removed: 220] [added: 231] Lennox Stores across the United States and Canada.

These stores provide an easy access solution for contractors and independent dealers to obtain universal service and replacement parts, supplies, convenience items, [removed: tools, Lennox equipment and OEM parts.]

Our global manufacturing, distribution, sales and marketing footprint serves customers in [removed: over 112] [added: approximately 100] countries worldwide.

We manufacture heating and cooling products in several locations in Europe and market these products through both direct and indirect distribution channels in Europe, the United Kingdom, [removed: Russia,] [added: Eastern Europe,] Turkey, Africa, and the Middle East.

We leverage intellectual property and innovative [added: designs across our businesses.]

- Residential Heating & Cooling - Carrier Global Corporation (Carrier, Bryant, Payne, Tempstar, Comfortmaker, Heil, Arcoaire, KeepRite, Day & Night); Trane Technologies plc (Trane, American Standard, [removed: Ameristar);] [added: Ameristar, Oxbox, RunTru);] Paloma Industries, Inc. (Rheem, Ruud, Weather King); Johnson Controls, Inc. (York, Luxaire, Coleman); Daikin Industries, Ltd. (Daikin, Goodman, Amana, GMC); and Melrose Industries PLC (Maytag, Westinghouse, Frigidaire, Tappan, Philco, Kelvinator, Gibson, Broan, NuTone).

- Refrigeration - Hussmann Corporation; Paloma Industries, Inc. (Rheem Manufacturing Company (Heat Transfer Products Group)); Emerson Electric Co. (Copeland); Carrier Global Corporation (Carrier); GEA Group (Kuba, Searle, Goedhart); Alfa Laval; Guntner GmbH; [removed: and] [added: Kelvion - Profroid (Carrier);] Panasonic Corp. [removed: (Sanyo).][added: (Sanyo); Technotrans; and Deltatherm.]

As of December 31, [removed: 2020,] [added: 2021,] we employed approximately [removed: 10,300] [added: 11,000] people.

Of these employees, approximately [removed: 4,500] [added: 4,800] were salaried and [removed: 5,800] [added: 6,200] were hourly.

Approximately [removed: 2,700] [added: 2,500] of our employees, including international locations, are represented by unions.

We currently do not anticipate any material adverse consequences resulting from negotiations to renew [removed: any] [added: other] collective bargaining agreements.

[removed: We] [added: To succeed in an ever-changing and competitive labor market, we] have identified priorities we believe are critical to our success in attracting, motivating, developing, and retaining employees.

Our senior managers, together with our human resources [removed: team] [added: team,] are devoted to promoting [removed: these] [added: the above] priorities to ensure we remain an employer of choice.

*Energy Efficiency.* The U.S. Department of Energy has numerous active energy conservation rulemakings that impact [removed: residential and commercial heating, air conditioning and refrigeration equipment.]

*Refrigerants.* The use of hydroflurocarbons (“HFCs”) as refrigerants for air conditioning and refrigeration equipment is [added: common practice in the HVACR industry and is regulated.]

Based on the facts presently known, we do not believe environmental cleanup costs associated with any Superfund sites about which we have received notice that we are a potentially responsible party will be [removed: material.][added: material to our results of operations.]

Many countries around the world as well as many states in the [removed: US] [added: U.S.] have enacted directives, laws, and regulations directed at preventing electrical and electronic equipment waste by encouraging reuse and recycling as well as restricting the use of hazardous products in electrical and electronic equipment.

Our executive officers, their present positions and their ages are as follows as of February [removed: 5, 2021:][added: 4, 2022:]

| Todd M. Bluedorn | | | [removed: 57] [added: 58] | | | Chairman of the Board and Chief Executive Officer | | |

| Joseph W. Reitmeier | | | [removed: 56] [added: 57] | | | Executive Vice President, Chief Financial Officer | | |

| Douglas L. Young | | | [removed: 58] [added: 59] | | | Executive Vice President, President and Chief Operating Officer, Residential Heating & Cooling | | |

| Gary S. Bedard | | | [removed: 56] [added: 57] | | | Executive Vice President, President and Chief Operating Officer, Worldwide Refrigeration | | |

| Prakash Bedapudi | | | [removed: 54] [added: 55] | | | Executive Vice President, Chief Technology Officer | | |

| Daniel M. Sessa | | | [removed: 56] [added: 57] | | | Executive Vice President, Chief Human Resources Officer | | |

| John D. Torres | | | [removed: 62] [added: 63] | | | Executive Vice President, Chief Legal Officer and Secretary | | |

| Elliot Zimmer | | | [removed: 44] [added: 45] | | | Executive Vice President, President and Chief Operating Officer, North America Commercial Heating & Cooling | | |

[removed: From 2005 through 2017,] [added: Since 2005,] Mr. Bedard served as Vice President and General [removed: Manager for the Company’s Lennox-branded] [added: Manager, LII] Residential [removed: business.][added: Heating and Cooling.]

He has also held the positions of Vice President, Residential [removed: Sales, Vice President Residential] Product Management, [added: LII Worldwide Heating and Cooling,] Director of Brand and Product Management, and District Manager for Lennox Industries’ [removed: New York District.]

He had previously served as Senior Vice President, General Counsel and Secretary for Freescale Semiconductor, a semiconductor [added: manufacturer that was originally part of Motorola.]

Prior to joining Motorola, Mr. Torres [removed: was] [added: served 13 years] in private practice in Phoenix, specializing in commercial [removed: law, for 13 years.][added: law.]

He holds a bachelor of arts from Notre Dame and a juris doctor from the University of [removed: Chicago.][added: Chicago*.*]

| | | | | | | | | | | | | Total | | | | | | $ | 4,194.1 | |

tools, Lennox equipment and OEM parts.

The Allied Air Enterprise business also sells a full line of heating, ventilation and cooling equipment through private label brands.

The Advanced Distributor Products (“ADP”) business and brand (“ADP Advanced Distributor Products”) sells evaporator coils, air handlers and unit heaters to independent HVAC wholesale distributors across the U.S. and Canada.

In 2021, we launched the Lennox Model L rooftop unit featuring the powerful CORE control system and advanced variable-speed technology to maximize rebates and energy savings.

On November 1, 2021, our Marshalltown, Iowa-based union ratified a five-year labor agreement that was immediately effective.

Further information is available in our Environmental Social and Governance (ESG) report available on our website.

Despite these efforts, we have experienced, and could continue to experience, higher employee absenteeism, particularly in manufacturing and distribution locations, as a result of COVID-19-related concerns and other related factors.

These concerns have decreased the pool of available qualified talent for certain functions.

As a result, we have made and continue to make strong efforts to maintain and recruit qualified talent and are committed to being competitive to retain the best talent possible.

residential and commercial heating, air conditioning and refrigeration equipment.

In July 2021, Mr. Bluedorn advised our Board of Directors that he intended to resign as Chief Executive Officer and as Chairman and a member of our Board of Directors in mid-2022.

New York District.

*Elliot S.

Previously, Elliot served as Vice President, Worldwide Supply Chain and Logistics and led our business development efforts.

Prior to joining LII in 2010, Elliot served as director of capacity planning and operations at Dr Pepper Snapple Group and as a senior associate with McKinsey and Company.

| | | | | | | | | | | | | Total | | | | | | $ | 3,634.1 | |

Our Advanced Distributor Products (“ADP”) operation builds evaporator coils and air handlers under the “ADP Advanced Distributor Products” brand and also builds evaporator coils under the “Lennox” brand and Allied Air Enterprise brands.

ADP sells ADP-branded evaporator coils to over 300 HVAC wholesale distributors across North America.

In 2014, we launched Lennox-branded variable refrigerant flow (“VRF”) commercial products through Lennox company-owned distribution.

designs across our businesses.

We found this especially useful in 2020 to understand and respond to the impact of COVID-19 on our workforce, both our onsite essential workers and our remote workers.

In 2020 we enhanced our diversity and inclusion programs by providing extensive unconscious bias training, increasing the focus on diversity and inclusion during our hiring processes, and expanding employee resource groups.

common practice in the HVACR industry and is regulated.

manufacturer that was originally part of Motorola.

Prior to joining the Company, Mr. Zimmer led a variety of supply chain functions at Dr. Pepper Snapple.

He began his professional career with McKinsey & Company in 2006.

For the fiscal year ended December 31, [removed: 2020][added: 2021]

As of June 30, [removed: 2020,] [added: 2021,] the aggregate market value of the common stock held by non-affiliates of the registrant was approximately [removed: $8.9] [added: $13] billion [removed: based on the closing price of the registrant’s common stock on the New York Stock Exchange.]

As of February [removed: 5, 2021,] [added: 4, 2022,] there were [removed: 37,733,565] [added: 36,636,874] shares of the registrant’s common stock outstanding.

Portions of the registrant’s [removed: 2020] [added: 2021] Definitive Proxy Statement to be filed with the Securities and Exchange Commission in connection with the registrant’s [removed: 2020] [added: 2021] Annual Meeting of Stockholders to be held on May [removed: 20, 2021] [added: 19, 2022] are incorporated by reference into Part III of this report.

| ITEM 1. | | | [removed: [Business](#i2b8b74d6976e4dd2a02f0ed4691bb7be_13)] [added: [Business](#i84425909cb754bdbab3f159ef4599267_13)] | | | [removed: [1](#i2b8b74d6976e4dd2a02f0ed4691bb7be_13)] [added: [1](#i84425909cb754bdbab3f159ef4599267_13)] | | |

| ITEM 1A. | | | [Risk [removed: Factors](#i2b8b74d6976e4dd2a02f0ed4691bb7be_16)] [added: Factors](#i84425909cb754bdbab3f159ef4599267_16)] | | | [removed: [8](#i2b8b74d6976e4dd2a02f0ed4691bb7be_16)] [added: [9](#i84425909cb754bdbab3f159ef4599267_16)] | | |

| ITEM 1B. | | | [Unresolved Staff [removed: Comments](#i2b8b74d6976e4dd2a02f0ed4691bb7be_19)] [added: Comments](#i84425909cb754bdbab3f159ef4599267_19)] | | | [removed: [14](#i2b8b74d6976e4dd2a02f0ed4691bb7be_19)] [added: [14](#i84425909cb754bdbab3f159ef4599267_19)] | | |

| ITEM 2. | | | [removed: [Properties](#i2b8b74d6976e4dd2a02f0ed4691bb7be_22)] [added: [Properties](#i84425909cb754bdbab3f159ef4599267_22)] | | | [removed: [15](#i2b8b74d6976e4dd2a02f0ed4691bb7be_22)] [added: [15](#i84425909cb754bdbab3f159ef4599267_22)] | | |

| ITEM 3. | | | [Legal [removed: Proceedings](#i2b8b74d6976e4dd2a02f0ed4691bb7be_25)] [added: Proceedings](#i84425909cb754bdbab3f159ef4599267_25)] | | | [removed: [15](#i2b8b74d6976e4dd2a02f0ed4691bb7be_25)] [added: [15](#i84425909cb754bdbab3f159ef4599267_25)] | | |

| ITEM 4. | | | [Mine Safety [removed: Disclosures](#i2b8b74d6976e4dd2a02f0ed4691bb7be_28)] [added: Disclosures](#i84425909cb754bdbab3f159ef4599267_28)] | | | [removed: [16](#i2b8b74d6976e4dd2a02f0ed4691bb7be_28)] [added: [16](#i84425909cb754bdbab3f159ef4599267_28)] | | |

| ITEM 5. | | | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i2b8b74d6976e4dd2a02f0ed4691bb7be_34)] [added: Securities](#i84425909cb754bdbab3f159ef4599267_34)] | | | [removed: [16](#i2b8b74d6976e4dd2a02f0ed4691bb7be_34)] [added: [16](#i84425909cb754bdbab3f159ef4599267_34)] | | |

| ITEM 6. | | | [Selected Financial [removed: Data](#i2b8b74d6976e4dd2a02f0ed4691bb7be_37)] [added: Data](#i84425909cb754bdbab3f159ef4599267_37)] | | | [removed: [17](#i2b8b74d6976e4dd2a02f0ed4691bb7be_37)] [added: [17](#i84425909cb754bdbab3f159ef4599267_37)] | | |

| ITEM 7. | | | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i2b8b74d6976e4dd2a02f0ed4691bb7be_40)] [added: Operations](#i84425909cb754bdbab3f159ef4599267_40)] | | | [removed: [17](#i2b8b74d6976e4dd2a02f0ed4691bb7be_40)] [added: [17](#i84425909cb754bdbab3f159ef4599267_40)] | | |

| ITEM 7A. | | | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#i2b8b74d6976e4dd2a02f0ed4691bb7be_73)] [added: Risk](#i84425909cb754bdbab3f159ef4599267_73)] | | | [removed: [32](#i2b8b74d6976e4dd2a02f0ed4691bb7be_73)] [added: [30](#i84425909cb754bdbab3f159ef4599267_73)] | | |

| ITEM 8. | | | [Financial Statements and Supplementary [removed: Data](#i2b8b74d6976e4dd2a02f0ed4691bb7be_76)] [added: Data](#i84425909cb754bdbab3f159ef4599267_76)] | | | [removed: [33](#i2b8b74d6976e4dd2a02f0ed4691bb7be_76)] [added: [31](#i84425909cb754bdbab3f159ef4599267_76)] | | |

| ITEM 9. | | | [Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#i2b8b74d6976e4dd2a02f0ed4691bb7be_196)] [added: Disclosure](#i84425909cb754bdbab3f159ef4599267_175)] | | | [removed: [82](#i2b8b74d6976e4dd2a02f0ed4691bb7be_196)] [added: [76](#i84425909cb754bdbab3f159ef4599267_175)] | | |

| ITEM 9A. | | | [Controls and [removed: Procedures](#i2b8b74d6976e4dd2a02f0ed4691bb7be_199)] [added: Procedures](#i84425909cb754bdbab3f159ef4599267_178)] | | | [removed: [82](#i2b8b74d6976e4dd2a02f0ed4691bb7be_199)] [added: [76](#i84425909cb754bdbab3f159ef4599267_178)] | | |

| ITEM 9B. | | | [Other [removed: Information](#i2b8b74d6976e4dd2a02f0ed4691bb7be_202)] [added: Information](#i84425909cb754bdbab3f159ef4599267_181)] | | | [removed: [82](#i2b8b74d6976e4dd2a02f0ed4691bb7be_202)] [added: [76](#i84425909cb754bdbab3f159ef4599267_181)] | | |

| ITEM 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#i2b8b74d6976e4dd2a02f0ed4691bb7be_208)] [added: Governance](#i84425909cb754bdbab3f159ef4599267_187)] | | | [removed: [82](#i2b8b74d6976e4dd2a02f0ed4691bb7be_208)] [added: [76](#i84425909cb754bdbab3f159ef4599267_187)] | | |

| ITEM 11. | | | [Executive [removed: Compensation](#i2b8b74d6976e4dd2a02f0ed4691bb7be_211)] [added: Compensation](#i84425909cb754bdbab3f159ef4599267_190)] | | | [removed: [82](#i2b8b74d6976e4dd2a02f0ed4691bb7be_211)] [added: [76](#i84425909cb754bdbab3f159ef4599267_190)] | | |

| ITEM 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i2b8b74d6976e4dd2a02f0ed4691bb7be_214)] [added: Matters](#i84425909cb754bdbab3f159ef4599267_193)] | | | [removed: [82](#i2b8b74d6976e4dd2a02f0ed4691bb7be_214)] [added: [76](#i84425909cb754bdbab3f159ef4599267_193)] | | |

| ITEM 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i2b8b74d6976e4dd2a02f0ed4691bb7be_217)] [added: Independence](#i84425909cb754bdbab3f159ef4599267_196)] | | | [removed: [83](#i2b8b74d6976e4dd2a02f0ed4691bb7be_217)] [added: [77](#i84425909cb754bdbab3f159ef4599267_196)] | | |

| ITEM 14. | | | [Principal Accounting Fees and [removed: Services](#i2b8b74d6976e4dd2a02f0ed4691bb7be_220)] [added: Services](#i84425909cb754bdbab3f159ef4599267_199)] | | | [removed: [83](#i2b8b74d6976e4dd2a02f0ed4691bb7be_220)] [added: [77](#i84425909cb754bdbab3f159ef4599267_199)] | | |

| ITEM 15. | | | [Exhibits and Financial Statement [removed: Schedules](#i2b8b74d6976e4dd2a02f0ed4691bb7be_226)] [added: Schedules](#i84425909cb754bdbab3f159ef4599267_205)] | | | [removed: [83](#i2b8b74d6976e4dd2a02f0ed4691bb7be_226)] [added: [77](#i84425909cb754bdbab3f159ef4599267_205)] | | |

| ITEM 16. | | | [Form 10-K [removed: Summary](#i2b8b74d6976e4dd2a02f0ed4691bb7be_232)] [added: Summary](#i84425909cb754bdbab3f159ef4599267_211)] | | | [removed: [86](#i2b8b74d6976e4dd2a02f0ed4691bb7be_232)] [added: [80](#i84425909cb754bdbab3f159ef4599267_211)] | | |

| | | | [SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND [removed: RESERVES](#i2b8b74d6976e4dd2a02f0ed4691bb7be_238)] [added: RESERVES](#i84425909cb754bdbab3f159ef4599267_217)] | | | [removed: [88](#i2b8b74d6976e4dd2a02f0ed4691bb7be_238)] [added: [81](#i84425909cb754bdbab3f159ef4599267_217)] | | |

based on the closing price of the registrant’s common stock on the New York Stock Exchange.

Auditor Name: KPMG LLP Auditor Location: Dallas, Texas Auditor Firm ID: 185

For the Fiscal Year Ended December 31, 2021

| | | | [SIGNATURES](#i84425909cb754bdbab3f159ef4599267_214) | | | [81](#i84425909cb754bdbab3f159ef4599267_214) | | |

INDEX

| | | | [SIGNATURES](#i2b8b74d6976e4dd2a02f0ed4691bb7be_235) | | | [87](#i2b8b74d6976e4dd2a02f0ed4691bb7be_235) | | |

The following chart lists our principal domestic and international manufacturing, distribution and office facilities as of December 31, [removed: 2020] [added: 2021] and indicates the business segment that uses such facilities, the approximate size of such facilities and whether such facilities are owned or leased.

| Saltillo, Mexico | | | Residential Heating & Cooling | | | Manufacturing & Distribution | | | [removed: 638] [added: 1,081] | | | Owned | | |

| Concord, NC | | | Residential Heating & Cooling | | | Distribution | | | [removed: 123] [added: 248] | | | Leased | | |

| | | | | | | | | | | | | | | |

As of the close of business on February [removed: 5, 2021,] [added: 4, 2022,] approximately [removed: 573] [added: 548] holders of record held our common stock.

The graph assumes that $100 was invested on December 31, [removed: 2015,] [added: 2016,] with dividends reinvested.

Our peer group includes AAON, Inc., Comfort Systems USA, Inc., Johnson Controls Inc., and Watsco, Inc. [removed: Peer group returns are weighted by market capitalization.]

[removed: ][added: ]

Our Board of Directors has authorized a total of [removed: $3] [added: $4] billion to repurchase shares of our common stock (collectively referred to as the “Share Repurchase Plans”), including an incremental [removed: $500 million] [added: $1.0 billion] share repurchase authorization in [removed: December 2019.][added: July 2021.]

As of December 31, [removed: 2020, $446] [added: 2021, $846] million is available to repurchase shares under the Share Repurchase Plans.

In the fourth quarter of [removed: 2020,] [added: 2021,] we purchased shares of our common stock as follows:

| October 1 through October 30 | | | 3,293 | | | | | | $ | 296.81 | | | | | — | | | | | | 846.0 | | |

| October 31 through November 27 | | | 306 | | | | | | 307.87 | | | | | | — | | | | | | 846.0 | | |

| November 28 through December 31 | | | 15,061 | | | | | | 327.75 | | | | | | — | | | | | | 846.0 | | |

| | | | 18,660 | | | | | | | | | | | | — | | | | | | | | |

Two companies previously included in the peer group index, Ingersoll-Rand plc and United Technologies Corporation, were removed due to their spin-off transactions during 2020.

| October 1 through October 31 | | | 3,991 | | | | | | $ | 284.87 | | | | | — | | | | | | 446.0 | | |

| November 1 through November 27 | | | 6,089 | | | | | | 301.55 | | | | | | — | | | | | | 446.0 | | |

| November 28 through December 31 | | | 17,515 | | | | | | 280.11 | | | | | | — | | | | | | 446.0 | | |

| | | | 27,595 | | | | | | | | | | | | — | | | | | | | | |

Not applicable

The following table presents selected financial data for each of the five years ended December 31, 2020 to 2016 (in millions, except per share data):

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | For the Years Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | 2020 | | | | | | 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | |

| Statements of Operations Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net Sales | | | $ | 3,634.1 | | | | | $ | 3,807.2 | | | | | $ | 3,883.9 | | | | | $ | 3,839.6 | | | | | $ | 3,641.6 | |

| Operating Income | | | 478.5 | | | | | | 656.9 | | | | | | 509.9 | | | | | | 494.5 | | | | | | 429.4 | | |

| Income From Continuing Operations | | | 357.1 | | | | | | 408.8 | | | | | | 360.3 | | | | | | 307.1 | | | | | | 278.6 | | |

| Net Income | | | 356.3 | | | | | | 408.7 | | | | | | 359.0 | | | | | | 305.7 | | | | | | 277.8 | | |

| Basic Earnings Per Share From Continuing Operations | | | 9.32 | | | | | | 10.49 | | | | | | 8.87 | | | | | | 7.28 | | | | | | 6.41 | | |

| Diluted Earnings Per Share From Continuing Operations | | | 9.26 | | | | | | 10.38 | | | | | | 8.77 | | | | | | 7.17 | | | | | | 6.34 | | |

| Cash Dividends Declared Per Share | | | 3.08 | | | | | | 2.95 | | | | | | 2.43 | | | | | | 1.96 | | | | | | 1.65 | | |

| Other Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Capital Expenditures | | | $ | 78.5 | | | | | $ | 105.6 | | | | | $ | 95.2 | | | | | $ | 98.3 | | | | | $ | 84.3 | |

| Research and Development Expenses | | | 66.8 | | | | | | 69.9 | | | | | | 72.2 | | | | | | 73.6 | | | | | | 64.6 | | |

| Balance Sheet Data at Period End: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total Assets | | | $ | 2,032.5 | | | | | $ | 2,034.9 | | | | | $ | 1,817.2 | | | | | $ | 1,891.5 | | | | | $ | 1,760.3 | |

| Total Debt | | | 980.6 | | | | | | 1,171.2 | | | | | | 1,041.3 | | | | | | 1,004.0 | | | | | | 868.2 | | |

| Stockholders’ (Deficit) Equity | | | (17.1) | | | | | | (170.2) | | | | | | (149.6) | | | | | | 50.1 | | | | | | 38.0 | | |

Information in the table above is not necessarily indicative of results of future operations.

To understand the factors that may affect comparability, the financial data should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the Consolidated Financial Statements and the related Notes to the Consolidated Financial Statements in Item 8, “Other Financial Statement Details,” of this Annual Report on Form 10-K.

Management, including our Chief Executive Officer and Chief Financial Officer, has undertaken an assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control - Integrated Framework* (2013) by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, management concluded that as of December 31, [removed: 2020,] [added: 2021,] the Company’s internal control over financial reporting was effective.

KPMG LLP, the independent registered public accounting firm that audited the Company’s Consolidated Financial Statements, has issued an audit report including an opinion on the effectiveness of our internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] a copy of which is included herein.

We have audited the accompanying consolidated balance sheets of Lennox International Inc. and subsidiaries (the Company) as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of operations, comprehensive (loss) income, stockholders’ [removed: (deficit) equity,] [added: deficit,] and cash flows for each of the years in the three-year period ended December 31, [removed: 2020,] [added: 2021,] and the related notes and Schedule II – Valuation and Qualifying Accounts and Reserves (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control – Integrated Framework* *(2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, [removed: 2020,] [added: 2021,] in conformity with U.S. generally accepted accounting principles.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2020] [added: 2021] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and [added: expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.]

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex [removed: judgment.][added: judgments.]

*Evaluation of the product [added: category] warranty liability*

The Company’s product warranty liability was [removed: $120] [added: $134.2] million as of December 31, [removed: 2020.][added: 2021.]

Assessing the assumptions used to estimate the product warranty liability, specifically, the estimated failure rates by product [added: category] by year, and estimated cost per failure, involved subjective and complex auditor judgment.

| | | | [added: | | | | | | | | | | | |] 2020 | | | | | | 2019 | | | [added: | | | | | |]

| Cash and cash equivalents | | | $ | [removed: 123.9] [added: 31.0] | | | | | $ | [removed: 37.3] [added: 123.9] | |

| Short-term investments | | | [removed: 5.1] [added: 5.5] | | | | | | [removed: 2.9] [added: 5.1] | | |

| Accounts and notes receivable, net of allowances of [removed: $9.6] [added: $10.7] and [removed: $6.1] [added: $9.6] in [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] respectively | | | [removed: 448.3] [added: 508.3] | | | | | | [removed: 477.8] [added: 448.3] | | |

| Inventories, net | | | [removed: 439.4] [added: 510.9] | | | | | | [removed: 544.1] [added: 439.4] | | |

| Other assets | | | [removed: 70.9] [added: 119.7] | | | | | | [removed: 58.8] [added: 70.9] | | |

| Total current assets | | | [removed: 1,087.6] [added: 1,175.4] | | | | | | [removed: 1,120.9] [added: 1,087.6] | | |

| Property, plant and equipment, net of accumulated depreciation of [removed: $880.6] [added: $888.8] and [removed: $824.3] [added: $880.6] in [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] respectively | | | [removed: 464.3] [added: 515.1] | | | | | | [removed: 445.4] [added: 464.3] | | |

| Right-of-use assets from operating leases | | | [removed: 194.4] [added: 196.1] | | | | | | [removed: 181.6] [added: 194.4] | | |

| Goodwill | | | [removed: 186.9] [added: 186.6] | | | | | | [removed: 186.5] [added: 186.9] | | |

| Deferred income taxes | | | [removed: 13.2] [added: 11.3] | | | | | | [removed: 21.5] [added: 13.2] | | |

| Other assets, net | | | [removed: 86.1] [added: 87.4] | | | | | | [removed: 79.0] [added: 86.1] | | |

| Total assets | | | $ | [added: 2,171.9 | | | | | $ |] 2,032.5 | | | | | $ | 2,034.9 | |

| Current maturities of long-term debt | | | [removed: 9.9] [added: 11.3] | | | | | | [removed: 321.9] [added: 9.9] | | |

| Current operating lease liabilities | | | [removed: 55.0] [added: 54.8] | | | | | | [removed: 52.7] [added: 55.0] | | |

| Accounts payable | | | [removed: 340.3] [added: 402.1] | | | | | | [removed: 372.4] [added: 340.3] | | |

| Accrued expenses | | | [removed: 296.1] [added: 358.9] | | | | | | [removed: 255.7] [added: 296.1] | | |

| Total current liabilities | | | [removed: 701.3] [added: 827.1] | | | | | | [removed: 1,002.7] [added: 701.3] | | |

| Long-term debt | | | [removed: 970.7] [added: 1,226.5] | | | | | | [removed: 849.3] [added: 970.7] | | |

| Long-term operating lease liabilities | | | [removed: 142.8] [added: 145.0] | | | | | | [removed: 131.0] [added: 142.8] | | |

| Pensions | | | [removed: 92.5] [added: 83.3] | | | | | | [removed: 87.4] [added: 92.5] | | |

| Other liabilities | | | [removed: 142.3] [added: 159.0] | | | | | | [removed: 134.7] [added: 142.3] | | |

| Total liabilities | | | [removed: 2,049.6] [added: 2,440.9] | | | | | | [removed: 2,205.1] [added: 2,049.6] | | |

| Preferred [removed: stock,$0.01] [added: stock, $0.01] par value, 25,000,000 shares authorized, no shares issued or outstanding | | | — | | | | | | — | | |

| Additional paid-in capital | | | [removed: 1,113.2] [added: 1,133.7] | | | | | | [removed: 1,093.5] [added: 1,113.2] | | |

| Retained earnings | | | [removed: 2,385.8] [added: 2,719.3] | | | | | | [removed: 2,148.7] [added: 2,385.8] | | |

| Accumulated other comprehensive loss | | | [removed: (97.2)] [added: (88.1)] | | | | | | [removed: (103.8)] [added: (97.2)] | | |

| Treasury stock, at cost, [removed: 48,820,969] [added: 50,536,125] shares and [removed: 48,575,901] [added: 48,820,969] shares for [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] respectively | | | [removed: (3,419.8)] [added: (4,034.8)] | | | | | | [removed: (3,309.5)] [added: (3,419.8)] | | |

February 15, 2022

| Loss from discontinued operations | | | — | | | | | | (0.02) | | | | | | — | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance as of December 31, 2021 | | | | | | $ | 0.9 | | | | | $ | 1,133.7 | | | | | $ | 2,719.3 | | | | | $ | (88.1) | | | | | $ | 50.5 | | | | | $ | (4,034.8) | | | | | | | | | | | $ | (269.0) | |

For the Years Ended December 31, 2021, 2020 and 2019

| Income from equity method investments | | | (11.8) | | | | | | (15.6) | | | | | | (13.4) | | |

If the expected future cash flows do not exceed the carrying value of the asset or assets being reviewed, an

The COVID-19 pandemic is creating supply chain disruptions and higher employee absenteeism in our factories and distribution locations.

As the COVID-19 pandemic continues, health concern risks remain.

| Restructuring charges | | | 1.8 | | | | | | 10.8 | | | | | | 10.3 | | |

- Restructuring charges, and

operations, are shown below (in millions):

| | | | 2021 | | | | | | 2020 | | | | | | 2019 | | |

| | | | 2021 | | | | | | 2020 | | | | | | 2019 | | |

| Net income | | | $ | 464.0 | | | | | $ | 356.3 | | | | | $ | 408.7 | |

| Income from continuing operations | | | $ | 12.47 | | | | | $ | 9.32 | | | | | $ | 10.49 | |

| Loss from discontinued operations | | | — | | | | | | (0.02) | | | | | | — | | |

| Net income | | | $ | 12.47 | | | | | $ | 9.30 | | | | | $ | 10.49 | |

| Income from continuing operations | | | $ | 12.39 | | | | | $ | 9.26 | | | | | $ | 10.38 | |

| Loss from discontinued operations | | | — | | | | | | (0.02) | | | | | | — | | |

| Net income | | | $ | 12.39 | | | | | $ | 9.24 | | | | | $ | 10.38 | |

| | | | 2021 | | | | | | 2020 | | |

| | | | 2021 | | | | | | 2020 | | |

| 2022 | | | $ | 59.6 | | | | | $ | 11.7 | |

| 2023 | | | 54.9 | | | | | | 8.7 | | |

| 2024 | | | 36.9 | | | | | | 5.2 | | |

| 2025 | | | 23.1 | | | | | | 2.9 | | |

| 2026 | | | 16.9 | | | | | | 0.7 | | |

| Thereafter | | | 19.9 | | | | | | 11.7 | | |

| | | | 2021 | | | | | | 2020 | | |

| Payments made in 2021 | | | (31.6) | | |

| | | | 2021 | | | | | | 2020 | | |

As of December 31, 2021 and 2020, we had receivables for probable insurance recoveries of $21.4 million and $19.8 million, respectively, that were recorded in Other Assets in the Consolidated Balance Sheets.

| | | | | | | | | | | | | | | | | | | | | | | | | 2021 | | | | | | 2020 | | | | | | 2019 | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

After the ASR Agreements were completed, the banks delivered the remaining shares under the arrangement.

We recorded $1.8 million of restructuring charges in 2021 from actions initiated in prior years.

Cost were primarily related severance and related expenses.

*Change in Accounting Principle*

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases as of January 1, 2019 due to the adoption of Accounting Standards Update (ASU) No. 2016-02, *Leases (Topic 842)*, as amended.

expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

February 16, 2021

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Change in fair value of available-for-sale marketable equity securities | | | — | | | | | | — | | | | | | (1.8) | | |

| Balance as of December 31, 2017 | | | | | | $ | 0.9 | | | | | $ | 1,061.5 | | | | | $ | 1,575.9 | | | | | $ | (157.4) | | | | | 45.4 | | | | | | $ | (2,430.8) | | | | | | | | | | | $ | 50.1 | |

| Cumulative effect adjustment upon adoption of new accounting standards (ASU 2016-16, ASU 2018-02 and ASC 606) | | | | | | — | | | | | | — | | | | | | 16.5 | | | | | | (22.7) | | | | | | — | | | | | | — | | | | | | | | | | | | (6.2) | | |

| Sale of marketable equity securities | | | | | | — | | | | | | — | | | | | | 1.8 | | | | | | (1.8) | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

In

In response to the COVID-19 pandemic, various national, state, and local governments where we, our suppliers, and our customers operate issued decrees prohibiting certain businesses from continuing to operate and certain classes of workers from reporting to work.

Those decrees have resulted in supply chain disruption and higher employee absenteeism in our factories.

Additionally, certain of our manufacturing facilities experienced short-term suspensions of operations for COVID-19 employee health concerns.

In February 2016, the FASB issued ASU No. 2016-02, *Leases* (“*ASC 842*”).

This accounting standard requires lessees to recognize a lease liability and a right-of-use (“ROU”) asset on the balance sheet for operating leases.

Accounting for finance leases is substantially unchanged.

ASC 842 is effective for fiscal years beginning after December 15, 2018 and we adopted the standard effective January 1, 2019.

In January 2017, the FASB issued ASU No. 2017-04, *Intangible - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment*.

ASU 2017-04 eliminates step two of the goodwill impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount.

Additionally, the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets should be disclosed.

ASU 2017-04 is effective for annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019.

In August 2018, the FASB issued ASU No. 2018-15, *Intangibles – Internal-Use Software (Topic 350-40): Customer’s Accounting for Implementation Costs incurred in a Cloud Computing Arrangement That is a Service Contract*.

ASU 2018-15 provides guidance to determine how implementation costs associated with cloud computing arrangements that are incurred to develop or obtain internal-use software should be capitalized or expensed as incurred.

ASU 2018-15 is effective for fiscal years beginning after December 15, 2019.

The adoption of ASU 2018-15 did not have a material impact on our consolidated results of operations, cash flows, or statement of financial position.

Changes in Accounting Standards Effective for Future Reporting Periods

We are currently assessing the impact of ASU 2019-12, but do not expect it to have a material impact on our financial statements.

(1) Effective January 1, 2019, we realigned our segment structure.

We shifted financial reporting of the European Commercial HVAC business from our Commercial Heating & Cooling segment to our Refrigeration segment as we manage both our commercial HVAC and refrigeration operations in Europe together.

We have revised our historical segment results to present them on a comparable basis.

| Special inventory write down | | | — | | | | | | — | | | | | | 0.2 | | |

- Special inventory write down,

- Restructuring charges.

| 2021 | | | $ | 59.8 | | | | | $ | 10.5 | |

| 2022 | | | 50.8 | | | | | | 8.7 | | |

| 2023 | | | 43.3 | | | | | | 5.8 | | |

| 2024 | | | 26.3 | | | | | | 2.6 | | |

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, [removed: 2020,] [added: 2021,] our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There were no changes during the year ended December 31, [removed: 2020] [added: 2021] in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Incorporated herein by reference from the Company’s definitive proxy statement, which will be filed no later than 120 days after December 31, [removed: 2019.][added: 2021.]

Incorporated herein by reference from the Company’s definitive proxy statement, which will be filed no later than 120 days after December 31, [removed: 2020.][added: 2021.]

Incorporated herein by reference from the Company’s definitive proxy statement, which will be filed no later than 120 days after December 31, [removed: 2020.][added: 2021.]

Incorporated herein by reference from the Company’s definitive proxy statement, which will be filed no later than 120 days after December 31, [removed: 2020.][added: 2021.]

Incorporated herein by reference from the Company’s definitive proxy statement, which will be filed no later than 120 days after December 31, [removed: 2020.][added: 2021.]

Our independent registered public accounting firm is KPMG LLP, Dallas, TX, Auditor Firm ID: 185.

- Report of Independent Registered Public Accounting Firm [added: (KPMG LLP, Dallas, TX, Auditor Firm ID: 185)]

- Consolidated Balance Sheets as of December 31, [removed: 2020] [added: 2021] and [removed: 2019][added: 2020]

- Consolidated Statements of Operations for the Years Ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

- Consolidated Statements of Comprehensive Income for the Years Ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

- Consolidated Statements of Stockholders’ [removed: (Deficit) Equity] [added: Deficit] for the Years Ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

- Consolidated Statements of Cash Flows for the Years Ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

- Notes to the Consolidated Financial Statements for the Years Ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

The financial statement schedule included in this Annual Report on Form 10-K is Schedule II - Valuation and Qualifying Accounts and Reserves for the Years Ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] (see Schedule II immediately following the signature page of this Annual Report on Form 10-K).

| [removed: 3.1] [added: 10.13*] | | | [removed: [Restated Certificate] [added: [Form] of [removed: Incorporation] [added: Indemnification Agreement entered into between LII and certain executive officers and directors] of [removed: Lennox International Inc. (“LII”)] [added: LII] (filed as Exhibit [removed: 3.1] [added: 10.15] to LII’s Registration Statement on Form S-1 (Registration [removed: Statement] No. 333-75725) filed on April 6, 1999 and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/1069202/0000950134-99-002720-index.html) | | |

| [removed: 3.2] [added: 10.10*] | | | [removed: [Amended] [added: [Lennox International Inc. Supplemental Retirement Plan, as amended] and [removed: Restated Bylaws] [added: restated as] of [removed: LII] [added: January 1, 2009] (filed as Exhibit [removed: 3.1] [added: 10.2] to [removed: LII’s] [added: LII's] Current Report on Form 8-K filed on December [removed: 16, 2013] [added: 17, 2008] and incorporated herein by [removed: reference).](http://www.sec.gov/Archives/edgar/data/1069202/000119312513474576/d644537d8k.htm)] [added: reference).](http://www.sec.gov/Archives/edgar/data/1069202/000136231008008300/c78431exv10w2.htm)] | | |

| [removed: 4.2] [added: 4.1] | | | [Indenture, dated as of May 3, 2010, between LII and U.S. Bank National Association, as trustee (filed as Exhibit 4.3 to LII’s Post-Effective Amendment No. 1 to Registration Statement on S-3 (Registration No. 333-155796) filed on May 3, [removed: 2010,] [added: 2010] and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/1017609/000095012310042399/d72548exv4w3.htm) | | |

| [removed: 4.3] [added: 4.2] | | | [Sixth Supplemental Indenture, dated as of November 3, 2016, among LII, each other existing Guarantor under the Indenture, dated as of May 3, 2010, as subsequently supplemented, and [removed: US] [added: U.S.] Bank National Association, as trustee (filed as Exhibit 4.2 to LII’s Current Report on Form 8-K filed on November 3, [removed: 2016,] [added: 2016] and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/1069202/000119312516758285/d284193dex42.htm) | | |

| [removed: 4.4] [added: 4.3] | | | [Form of 3.000% Notes due 2023 (filed as Exhibit A in Exhibit 4.2 to LII’s Current Report on Form 8-K filed on November 3, [removed: 2016,] [added: 2016] and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/1069202/000119312516758285/d284193dex42.htm) | | |

| [removed: 4.5] [added: 4.4] | | | [removed: [Eighth] [added: [Ninth] Supplemental Indenture, dated as of [removed: May 22,] [added: July 30,] 2020, among [removed: Lennox Switzerland GmbH, Lennox International Inc.,] [added: LII,] each [removed: other] existing Guarantor under the Indenture, dated as of May 3, 2010, as subsequently supplemented, and [removed: US] [added: U.S.] Bank National Association, as trustee (filed as Exhibit [removed: 4.7] [added: 4.2] to LII’s [removed: Quarterly] [added: Current] Report on Form [removed: 10-Q] [added: 8-K] filed on July [removed: 20,] [added: 30,] 2020 and incorporated herein by [removed: reference)](http://www.sec.gov/Archives/edgar/data/1069202/000106920220000039/lii-ex472020lennoxeigh.htm)[.](http://www.sec.gov/Archives/edgar/data/1069202/000106920220000039/lii-ex472020lennoxeigh.htm)] [added: reference).](http://www.sec.gov/Archives/edgar/data/1069202/000119312520203588/d22651dex42.htm)] | | |

| [removed: 4.6] [added: 4.7] | | | [removed: [Ninth] [added: [Tenth] Supplemental Indenture, dated [added: as of] July [removed: 30, 2020,] [added: 14, 2021,] among LII, each existing Guarantor under the Indenture, dated as of May 3, 2010, as subsequently supplemented, and U.S. Bank National Association, as trustee (filed [removed: as Exhibit 4.2 to LII’s Current Report on Form 8-K filed on July 30, 2020, and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/1069202/000119312520203588/d22651dex42.htm)] [added: herewith).](https://www.sec.gov/Archives/edgar/data/1069202/000162828022002664/lii-ex47_20211231x10k.htm)] | | |

| [removed: 4.7] [added: 4.5] | | | [Form of 1.350% Notes due 2025 (filed as Exhibit A in Exhibit 4.2 to LII’s Current Report on Form 8-K filed on July 30, [removed: 2020,] [added: 2020] and incorporated herein by [removed: reference)](http://www.sec.gov/Archives/edgar/data/1069202/000119312520203588/d22651dex42.htm)[.](http://www.sec.gov/Archives/edgar/data/1069202/000119312520203588/d22651dex42.htm)] [added: reference).](http://www.sec.gov/Archives/edgar/data/1069202/000119312520203588/d22651dex42.htm)] | | |

| [removed: 4.8] [added: 4.6] | | | [Form of 1.700% Notes due 2027 (filed as Exhibit B in Exhibit 4.2 to LII’s Current Report on Form 8-K filed on July 30, [removed: 2020,] [added: 2020] and incorporated herein by [removed: reference](http://www.sec.gov/Archives/edgar/data/1069202/000119312520203588/d22651dex42.htm)).] [added: reference).](http://www.sec.gov/Archives/edgar/data/1069202/000119312520203588/d22651dex42.htm)] | | |

| [removed: 4.9] [added: 4.8] | | | [Description of Securities (filed [removed: herewith)](https://www.sec.gov/Archives/edgar/data/1069202/000106920221000007/lii-ex49_20201231x10k.htm)] [added: herewith)](https://www.sec.gov/Archives/edgar/data/1069202/000162828022002664/lii-ex48_20211231x10k.htm).] | | |

| 10.1 | | | [removed: [Seventh Amended and Restated Credit Facility] [added: [Credit] Agreement, dated as of July [removed: 30, 2020,] [added: 14, 2021,] among Lennox International Inc., a Delaware corporation, the [removed: Lenders] [added: Banks] party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent (filed as [removed: Exhibit](http://www.sec.gov/Archives/edgar/data/1069202/000119312520203588/d22651dex101.htm) [10.1] [added: Exhibit 10.1] to LII’s Current Report on Form 8-K filed on July [removed: 30, 2020,] [added: 15, 2021] and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/1069202/000119312520203588/d22651dex101.htm) | | |

| 10.3 | | | [Amendment No. [removed: 10] [added: 11] to Amended and Restated Receivables Purchase Agreement, dated as of November [removed: 13, 2019,] [added: 12, 2021,] among LPAC Corp., as the Seller, Lennox Industries Inc., as the Master Servicer, Lennox International Inc., Victory Receivables Corporation, as a Purchaser, MUFG Bank, Ltd., formerly known as The Bank of Tokyo-Mitsubishi UFJ, Ltd., as administrative agent for the Investors, the purchaser agent for the MUFG Purchaser Group and a MUFG Liquidity Bank, Wells Fargo Bank, N.A., as the purchaser agent for the WFB Purchaser Group and a WFB Liquidity Bank, and PNC Bank, N.A., as the purchaser agent for the PNC Purchaser Group and a PNC Liquidity Bank, including attachments (filed as Exhibit 10.1 to LII’s Current Report on Form 8-K filed on November [removed: 19, 2019,] [added: 12, 2021] and incorporated herein by [removed: reference).](http://www.sec.gov/Archives/edgar/data/1069202/000119312519295555/d822980dex101.htm)] [added: reference).](https://www.sec.gov/Archives/edgar/data/1069202/000119312521332601/d246817dex101.htm)] | | |

| 10.4* | | | [Lennox International Inc. 2019 Equity and Incentive Compensation Plan (filed as Exhibit 10.1 to LII’s Current Report on Form 8-K filed on May 24, [removed: 2019, and] [added: 2019](http://www.sec.gov/Archives/edgar/data/1069202/000119312519157041/d752008dex101.htm) [and] incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/1069202/000119312519157041/d752008dex101.htm) | | |

| 10.5* | | | [Form of Long-Term Incentive Award Agreement for U.S. Employees - Vice President and Above (for use under the 2019 Incentive Plan)](http://www.sec.gov/Archives/edgar/data/1069202/000106920220000004/lii-ex101820191231x10k.htm) [(filed as Exhibit 10.18 to LII’s Annual Report on Form 10-K filed on February [removed: 18,2020] [added: 18,](http://www.sec.gov/Archives/edgar/data/1069202/000106920220000004/lii-ex101820191231x10k.htm) [](http://www.sec.gov/Archives/edgar/data/1069202/000106920220000004/lii-ex101820191231x10k.htm)[2020] and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/1069202/000106920220000004/lii-ex101820191231x10k.htm) | | |

| [removed: 10.6*] [added: 10.7*] | | | [Form of Restricted Stock Unit Award Agreement for Non-Employee Directors (for use under the 2019 Incentive Plan)](http://www.sec.gov/Archives/edgar/data/1069202/000106920220000004/lii-ex101920191231x10k.htm) [(filed as Exhibit [removed: 10.1](http://www.sec.gov/Archives/edgar/data/1069202/000106920220000004/lii-ex101920191231x10k.htm)[9](http://www.sec.gov/Archives/edgar/data/1069202/000106920220000004/lii-ex101920191231x10k.htm) [to] [added: 10.19 to] LII’s Annual Report on Form 10-K filed on February [removed: 18,2020] [added: 18,](http://www.sec.gov/Archives/edgar/data/1069202/000106920220000004/lii-ex101920191231x10k.htm) [](http://www.sec.gov/Archives/edgar/data/1069202/000106920220000004/lii-ex101920191231x10k.htm)[2020] and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/1069202/000106920220000004/lii-ex101920191231x10k.htm) | | |

| [removed: 10.7*] [added: 10.8*] | | | [Form of Short-Term Incentive Program for Lennox International Inc. and its Subsidiaries](http://www.sec.gov/Archives/edgar/data/1069202/000106920220000004/lii-ex102020191231x10k.htm) [(filed as Exhibit 10.20 to LII’s Annual Report on Form 10-K filed on February 18,2020 and incorporated herein by reference)](http://www.sec.gov/Archives/edgar/data/1069202/000106920220000004/lii-ex102020191231x10k.htm)[.](http://www.sec.gov/Archives/edgar/data/1069202/000106920220000004/lii-ex102020191231x10k.htm) | | |

| [removed: 10.8*] [added: 10.9*] | | | [Lennox International Inc. Profit Sharing Restoration Plan, as amended and restated as of January 1, 2009 (filed as Exhibit 10.3 to LII's Current Report on Form 8-K filed on December 17, 2008 and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/1069202/000136231008008300/c78431exv10w3.htm) | | |

| [removed: 10.9*] [added: 10.18*] | | | [Lennox International Inc. [removed: Supplemental] [added: Directors'] Retirement [removed: Plan, as amended] [added: Plan (as Amended] and [removed: restated] [added: Restated] as of January 1, [removed: 2009] [added: 2010)] (filed as Exhibit [removed: 10.2] [added: 10.1] to LII's Current Report on Form 8-K filed on December [removed: 17, 2008] [added: 16, 2009] and incorporated herein by [removed: reference).](http://www.sec.gov/Archives/edgar/data/1069202/000136231008008300/c78431exv10w2.htm)] [added: reference).](http://www.sec.gov/Archives/edgar/data/1069202/000095012309071289/c93749exv10w1.htm)] | | |

| [removed: 10.10*] [added: 10.11*] | | | [Amendment Number One to the Lennox International Inc. Supplemental Retirement Plan, as amended and restated as of January 1, 2009, dated December 28, 2018 (filed as Exhibit 10.23 to LII’s Annual Report on Form 10-K filed on February [removed: 19,2019] [added: 19,](http://www.sec.gov/Archives/edgar/data/1069202/000106920219000008/lii-ex1023_20181231x10k.htm) [](http://www.sec.gov/Archives/edgar/data/1069202/000106920219000008/lii-ex1023_20181231x10k.htm)[2019] and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/1069202/000106920219000008/lii-ex1023_20181231x10k.htm) | | |

| [removed: 10.11*] [added: 10.12*] | | | [Lennox International Inc. Supplemental Restoration Retirement Plan, effective as of January 1, 2019, dated December 28, 2018 (filed as Exhibit 10.24 to LII’s Annual Report on Form 10-K filed on February [removed: 19,2019] [added: 19,](http://www.sec.gov/Archives/edgar/data/1069202/000106920219000008/lii-ex1024_20181231x10k.htm) [](http://www.sec.gov/Archives/edgar/data/1069202/000106920219000008/lii-ex1024_20181231x10k.htm)[2019] and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/1069202/000106920219000008/lii-ex1024_20181231x10k.htm) | | |

| [removed: 10.12*] [added: 10.15*] | | | [Form of [removed: Indemnification] [added: Amendment to Employment] Agreement entered into between LII and certain executive officers [removed: and directors] of LII (filed as Exhibit [removed: 10.15] [added: 10.2] to [removed: LII’s Registration Statement] [added: LII's Current Report] on Form [removed: S-1 (Registration No. 333-75725)] [added: 8-K] filed on [removed: April 6, 1999] [added: December 12, 2007] and incorporated herein by [removed: reference).](http://www.sec.gov/Archives/edgar/data/1069202/0000950134-99-002720-index.html)] [added: reference).](http://www.sec.gov/Archives/edgar/data/1069202/000136231007003352/c71756exv10w2.htm)] | | |

| [removed: 10.13*] [added: 10.14*] | | | [Form of Employment Agreement entered into between LII and certain executive officers of LII (filed as Exhibit 10.30 to LII's Annual Report on Form 10-K filed on February 27, 2007 and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/1069202/000095013407004266/d43577exv10w30.htm) | | |

| [removed: 10.14*] [added: 10.17*] | | | [Form of [removed: Amendment to] [added: Change of Control] Employment Agreement entered into between LII and certain executive officers of LII (filed as Exhibit [removed: 10.2] [added: 10.1] to LII's Current Report on Form 8-K filed on December [removed: 12, 2007] [added: 17, 2008] and incorporated herein by [removed: reference).](http://www.sec.gov/Archives/edgar/data/1069202/000136231007003352/c71756exv10w2.htm)] [added: reference).](http://www.sec.gov/Archives/edgar/data/1069202/000136231008008300/c78431exv10w1.htm)] | | |

| [removed: 10.15*] [added: 10.16*] | | | [Form of Change of Control Agreement entered into between LII and certain executive officers of LII (filed as Exhibit 10.1 to LII's Current Report on Form 8-K filed on July 17, 2012 and incorporated herein by reference).](http://www.sec.gov/Archives/edgar/data/1069202/000119312512304640/d381083dex101.htm) | | |

| [removed: 10.16*] [added: 10.20*] | | | [Form of [removed: Change of Control Employment Agreement entered into] [added: Award Agreement, dated December 10, 2021,] between [removed: LII] [added: Lennox International Inc.] and certain [added: named] executive officers [removed: of LII] (filed as Exhibit 10.1 to [removed: LII's] [added: LII’s] Current Report on Form 8-K filed on December [removed: 17, 2008] [added: 14, 2021] and incorporated herein by [removed: reference).](http://www.sec.gov/Archives/edgar/data/1069202/000136231008008300/c78431exv10w1.htm)] [added: reference).](https://www.sec.gov/Archives/edgar/data/1069202/000119312521356791/d251139dex101.htm)] | | |

| [removed: 10.17*] [added: 10.19*] | | | [removed: [Lennox] [added: [Retention Agreement, dated July 12, 2021, between Lennox] International Inc. [removed: Directors' Retirement Plan (as Amended] and [removed: Restated as of January 1, 2010)] [added: Douglas L. Young] (filed as Exhibit 10.1 to [removed: LII's] [added: LII’s] Current Report on Form 8-K filed on [removed: December 16, 2009] [added: July 14, 2021] and incorporated herein by [removed: reference).](http://www.sec.gov/Archives/edgar/data/1069202/000095012309071289/c93749exv10w1.htm)] [added: reference).](https://www.sec.gov/Archives/edgar/data/0001069202/000119312521214688/d201576dex101.htm)] | | |

| 21.1 | | | [Subsidiaries of LII (filed [removed: herewith).](https://www.sec.gov/Archives/edgar/data/1069202/000106920221000007/lii-ex211_20201231x10k.htm)] [added: herewith).](https://www.sec.gov/Archives/edgar/data/1069202/000162828022002664/lii-ex211_20211231x10k.htm)] | | |

| 22.1 | | | [List of Guarantor [removed: Subsidiaries](https://www.sec.gov/Archives/edgar/data/1069202/000106920221000007/lii-exhibit22120201231x10k.htm)] [added: Subsidiaries (filed herewith).](https://www.sec.gov/Archives/edgar/data/1069202/000162828022002664/lii-ex221_20211231x10k.htm)] | | |

| 23.1 | | | [Consent of KPMG LLP (filed [removed: herewith).](https://www.sec.gov/Archives/edgar/data/1069202/000106920221000007/lii-ex231_20201231x10k.htm)] [added: herewith).](https://www.sec.gov/Archives/edgar/data/1069202/000162828022002664/lii-ex231_20211231x10k.htm)] | | |

| 31.1 | | | [Certification of the principal executive officer (filed [removed: herewith).](https://www.sec.gov/Archives/edgar/data/1069202/000106920221000007/lii-ex311_20201231x10k.htm)] [added: herewith).](https://www.sec.gov/Archives/edgar/data/1069202/000162828022002664/lii-ex311_20211231x10k.htm)] | | |

| 31.2 | | | [Certification of the principal financial officer (filed [removed: herewith).](https://www.sec.gov/Archives/edgar/data/1069202/000106920221000007/lii-ex312_20201231x10k.htm)] [added: herewith).](https://www.sec.gov/Archives/edgar/data/1069202/000162828022002664/lii-ex312_20211231x10k.htm)] | | |

| 32.1 | | | [Certification of the principal executive officer and the principal financial officer pursuant to 18 U.S.C. Section 1350 (furnished [removed: herewith).](https://www.sec.gov/Archives/edgar/data/1069202/000106920221000007/lii-ex321_20201231x10k.htm)] [added: herewith).](https://www.sec.gov/Archives/edgar/data/1069202/000162828022002664/lii-ex321_20211231x10k.htm)] | | |

| 3.1 | | | [Restated Certificate of Incorporation of Lennox International Inc. (“LII”) (filed herewith).](https://www.sec.gov/Archives/edgar/data/1069202/000162828022002664/lii-ex31_20211231x10k.htm) | | |

| 3.2 | | | [Amended and Restated Bylaws of LII (filed herewith).](https://www.sec.gov/Archives/edgar/data/1069202/000162828022002664/lii-ex32_20211231x10k.htm) | | |

| 10.2 | | | [Guaranty Agreement, dated as of July 14, 2021, among the guarantors party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (filed as Exhibit 10.2 to LII’s Current Report on Form 8-K filed on July 15, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0001069202/000119312521216428/d192243dex102.htm) | | |

| 10.6* | | | [Form of Long-Term Incentive Award Agreement for Non-U.S. Employees - Vice President and Above (for use under the 2019 Incentive Plan) (filed as Exhibit 10.3 to LII’s Quarterly Report on Form 10-Q filed on October 25, 2021 and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/0001069202/000162828021020422/long-termincentiveawardagr.htm) | | |

| 10.2 | | | [Form of Seventh Amended and Restated Subsidiary Guaranty Agreement for the Seventh Amended and Restated Credit Facility dated as of July 30, 2020 signed by Allied Air Enterprises LLC, Advanced Distributor Products LLC, Heatcraft Inc., Heatcraft Refrigeration Products LLC, Lennox Global LLC, Lennox Industries Inc., LGL Australia (US) Inc., Lennox National Account Services LLC, LGL Europe Holding Co. and Lennox Switzerland GmbH (filed as Exhibit C in Exhibit 10.1 to LII's Current Report on Form 8-K filed on July 30, 2020 and incorporated herein by reference)](http://www.sec.gov/Archives/edgar/data/1069202/000119312520203588/d22651dex101.htm) | | |

[removed: February 16, 2021][added: | 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| /s/ TODD M. BLUEDORN | | | | | | Chief Executive Officer and Chairman of the Board of Directors | | | February [removed: 16, 2021] [added: 15, 2022] | | |

| /s/ JOSEPH W. REITMEIER | | | | | | Executive Vice President and Chief Financial Officer | | | February [removed: 16, 2021] [added: 15, 2022] | | |

| /s/ CHRIS A. KOSEL | | | | | | Vice President, Controller and Chief Accounting Officer | | | February [removed: 16, 2021] [added: 15, 2022] | | |

| /s/ TODD J. TESKE | | | | | | Lead Director | | | February [removed: 16, 2021] [added: 15, 2022] | | |

| /s/ SHERRY L. BUCK | | | | | | Director | | | February [removed: 16, 2021] [added: 15, 2022] | | |

| /s/ JANET K. COOPER | | | | | | Director | | | February [removed: 16, 2021] [added: 15, 2022] | | |

| /s/ MAX H. MITCHELL | | | | | | Director | | | February [removed: 16, 2021] [added: 15, 2022] | | |

| /s/ JOHN W. NORRIS, III | | | | | | Director | | | February [removed: 16, 2021] [added: 15, 2022] | | |

| /s/ KAREN H. QUINTOS | | | | | | Director | | | February [removed: 16, 2021] [added: 15, 2022] | | |

| /s/ KIM K.W. RUCKER | | | | | | Director | | | February [removed: 16, 2021] [added: 15, 2022] | | |

| /s/ GREGORY T. SWIENTON | | | | | | Director | | | February [removed: 16, 2021] [added: 15, 2022] | | |

| /s/ SHANE D. WALL | | | | | | Director | | | February [removed: 16, 2021] [added: 15, 2022] | | |

For the Years Ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

February 15, 2022

| | | | | | | | | | | | |

| | | | | | | | | | | | |

| Allowance for doubtful accounts | | | $ | 9.6 | | | | | $ | 0.3 | | | | | $ | (0.4) | | | | | $ | 1.2 | | | | | $ | — | | | | | $ | 10.7 | |

| /s/ JOHN E. MAJOR | | | | | | Director | | | February 16, 2021 | | |

| John E. Major | | | | | | | | | | | |

| 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Allowance for doubtful accounts | | | $ | 5.9 | | | | | $ | 4.8 | | | | | $ | (3.7) | | | | | $ | 0.6 | | | | | $ | (1.3) | | | | | $ | 6.3 | |